Carlo Ancelotti today revealed he had been released from his AC Milan contract, paving the way for him to take the reins at Chelsea.

Walking away: Carlo Ancelotti ponders his next step in Florence today

And outgoing Stamford Bridge boss Guus Hiddink has called for his successor to be given time to return the club to the top.

Ancelotti is set to be confirmed as the new boss at Stamford Bridge in the next 48 hours and leaves AC Milan in good shape after guiding them to a 2-0 defeat of Fiorentina this afternoon on the final day of the Italian league season.

The result guarantees third for the Rossoneri and qualification for the Champions League group stage.

The 49-year-old insisted he had not signed an agreement with
Chelsea, but Sportsmail understands the formalities will be completed
early this week.

Sportsmail revealed in April that Chelsea had turned to Ancelotti after giving up hope of convincing Hiddink to stay beyond the end of the season.

Ancelotti admitted today he had spoken to Milan vice-president Adriano Galliani about leaving 'some time ago' but insisted he had not made a decision until the end of the season.

Hiddink is already back in Russia to concentrate on his role as the
country's national-team boss after guiding Chelsea to FA Cup success in
Saturday's clash with Everton.

And he has told Stamford Bridge owner Roman Abramovich that the club
now needs a stint of stability after the disruption of four managers in
two seasons.

'The club have recognised there have been too many changes,' said the Dutchman. 'Now they need some stability. That is key for this club.

'Everyone needs a short-term strategy but you must also have one that lasts a bit longer, which allows you to build the team up. Then you can keep up to the high demands this team must deliver.'

Michael Ballack and Nicolas Anelka both agree that their new boss must have a longer stretch in charge that Luiz Felipe Scolari's disastrous eight months in west London.

Arrivederci: It's a double goodbye in Florence with Ancelotti embracing retiring Milan legend Paolo Maldini, who was warmly received by home and away fans alike

A BRIEF HISTORY OF CARLO ANCELOTTI

1959: Born in Reggiolo, Italy on June 10.

1976: Begins professional playing career with Parma.

1979: Joins Roma.

1980: Wins Coppa Italia with the Giallorossi, who go on to win the trophy again in 1981, 1984 and 1986.

1983: Part of the Roma side that wins the Serie A title.

1984: Does not feature as Roma lose to Liverpool on penalties in the European Cup final on their home ground.

1987: Joins AC Milan.

1988: Milan win the domestic title in Ancelotti's first season at San Siro.

1989: Part of the Milan side which wins the European Cup, beating Steaua Bucharest 4-0 in the final.

1990:
Milan retain European title with a 1-0 win over Benfica. Ancelotti is
part of the Italy squad for the 1990 World Cup on home soil, where they
lose in the semi-finals to Argentina.

1992: The Rossoneri win the Italian league title. Ancelotti retires from playing.

1995-96:
Takes up his first coaching post with Serie B side Reggiana. Leads the
side to promotion to the top flight, before leaving to join Parma.

1996-97: Leads Parma to second place in Serie A.

1998: Appointed manager of Juventus.

2001:
After a fifth-place finish in his first season at the Stadio delle
Alpi, steers Juve to consecutive second-place finishes in 1999-2000 and
2000-01.

2001: November - Appointed manager of AC Milan, succeeding Fatih Terim who was sacked after five months at the helm.

2003: Manages Milan to Champions League glory as they beat Juventus on penalties in the final at Old Trafford.

2004: Leads Milan to Serie A title.

2005:
Suffers major disappointment as Milan let a 3-0 lead slip to be pegged
back to 3-3 by Liverpool in the Champions League final in Istanbul. The
Reds win on penalties.

2006-07: Milan begin the season docked eight points for their part in the 'calciopoli' match-fixing scandal.

2007: Gains his revenge on Rafael Benitez as Milan beat Liverpool 2-1 in the Champions League final in Athens.

2008: Milan rebuff a reported approach from Chelsea to talk to Ancelotti about succeeding Avram Grant.

2009:
May 31 - After overseeing a 2-0 Serie A win over Fiorentina which
guaranteed Milan's place in the Champions League group stages,
Ancelotti confirms his contract with the club has been mutually
terminated. He denies, however, that he has agreed a deal with Chelsea.

After the Cup final, Ballack admitted Ancelotti would take
the reins barring a last-minute U-turn and said: 'It is not done but it
looks like he (Ancelotti) will be the coach next year,' said Ballack.
'I don't know him very well. But he has had great success with AC Milan.

'I think that's what we need at Chelsea, we need consistency. You always need time to adapt to a new manager.

'But in football you if you don't get a result, you are under pressure. The coach is the first person who is under pressure but when a new manager comes you should give him time.

'It is not always like under it wasunder Guus where somebody comes in and the team starts winning straight away - that is not normal.

'Every coach works with different methods and the players have to get to know him - hopefully we won't need too much time because if we do we will be a little bit behind.'

Anelka admits he would love to see Hiddink return to Stamford Bridge one day, but called for Chelsea to plan for the long term.

After picking up the FA Cup, the France striker said: 'It was a great way to say goodbye to Guus. He has had a major influence on the team and the cup was our way to say thank you to him.

'We will miss him, and we hope that maybe in time he will come back. Why not?

'But we know he will now not be with us next season. It could be (AC Milan coach Carlo) Ancelotti next, and he would be a good choice, but whoever comes in we will do our best for him and the club.'

However, the former Arsenal striker suggested Ancelotti was not best qualified candidate for the post.

'We need someone who knows English football, who knows about the English spirit and this club,' said Anelka.

'He (Ancelotti) has great experience and I think he can deal with the situation.

'There
is not much that we need to change to win the Premier League next
season. We have a great team, which is the most important thing, but we
have to change the manager again and we will need a bit of time to
adapt.

Warning: Chelsea striker Nicolas Anelka

'We have had several people in charge in a short time. But it is better for the players if the new man has more time, and that he is here for the long term.'

Hiddink enjoyed his interim job so much that he admits a return to England in the future is appealing.

But, at 62, he is not making any predictions about his future beyond next summer's World Cup in South Africa, after which his contract with Russia expires.

'Once when I was working in Spain I said I might go and do a job that was sports-related but not with a team,' he said. 'I could not keep that promise, so I won't make another.

'I don't know what my future will be. As long as I feel energetic and I can deliver, I might go on. But you can never predict the future.'

AC Milan have confirmed current sporting director Leonardo, the former Brazil international, will take over from Ancelotti at the San Siro.